Insider Analysis: Can Outsourced Clinical Trials Also Be The Best?

The Potential To Harmonize Best Practices in China, India and Globally (Part 1 of 2)

By: Leslie A. Platt, Jason Schwartz, Reza Zarghamee, and Vladimir Chechik, Pillsbury Winthrop Shaw Pittman LLP, Washington, D.C.

Drawn by lower costs, skilled labor and large patient populations, multinational biopharmaceutical companies are steadily moving more and more of their research operations into developing countries. China and India are perhaps the two most attractive destinations for outsourcing clinical trials, due to cost-efficiencies, patient availability, professional expertise and regulatory conditions.[1] Indeed, during just the past five years, Novo Nordisk, AstraZeneca, Eli Lilly, Roche, GlaxoSmithKline, Aventis, Novartis, and Pfizer all have opened research and multisite clinical trial facilities in China, India or both.[2]

Despite their appeal for clinical research , the regulatory environments in China, India and other developing countries are still young and evolving. Problems, such as inconsistent standards and inadequate enforcement, plague even mature regulatory structures (for example, in September 2007, the U.S. Food and Drug Administration (U.S. FDA) acknowledged that it lacks the capacity to inspect even 1 percent of domestic clinical drug trials)[3], but such difficulties are undoubtedly exacerbated for the relatively less experienced drug regulators in China and India.

Recent systems failures and scandals involving food and drug exports from China demonstrate just how challenging it is for new government entities to establish and enforce best practices within new industries – and just how devastating the consequences of failure can be.[4] To protect both the safety of patients and the multi-billion-dollar future of outsourced clinical trials, the biopharmaceutical research industry must avoid similar systems failures. Now more than ever, the world needs to facilitate, reward, and demand clinical research that is benchmarked to internationally-recognized performance standards.

The Advantages Of Outsourcing Clinical Trials

From 1990 to 1999, the number of non-U.S. clinical investigators conducting research for U.S. drug applications increased 16-fold.[5] That trend has continued, and in September 2007, the U.S. FDA estimated that nearly 25 percent of clinical trials for all products that the agency regulates occur abroad.[6] Biopharmaceutical companies are predicted to double their clinical research activities in developing countries by 2010, with the market for outsourced trials expected to hit $1.5 billion in India alone, that same year.[7]

The driving forces behind these numbers are patient availability and cost-efficiency. Partly due to the requirements of sound science and government regulators, and partly due to recent controversies involving medical side effects (such as heart attacks attributable to Vioxx)[8], drug companies now test their products with increasingly large studies. In the 1980s, the average new drug test involved approximately 1,300 research volunteers; a decade later, that number more than tripled.[9] 

Developing countries can more easily provide the large, genetically diverse patient pools necessary to fill these clinical trials. China hosts the world’s greatest urban population; India is home to more than 32 million diabetics.[10] Additionally, patients in developing countries tend to be more “treatment naïve” (meaning patients are unexposed to other medical treatments and exhibit relatively advanced disease states) and willing to enroll in placebo-control trials (versus the active-control trials that Western patients often demand).[11] Consequently, the clinical trials conducted in developing countries can – theoretically – generate more reliable data than those conducted in the United States or Europe.

Moreover, the results of these clinical trials can be delivered more quickly and cheaply. Both India and China have hundreds of thousands of highly credentialed doctors, nurses, technicians and researchers, many of whom speak English fluently but are paid up to four-fifths less than their U.S. counterparts.[12] Combined with low infrastructure costs, this less-expensive labor force can reduce the overall price tag on drug trials by anywhere from 30 percent to 65 percent.[13] 

The national infrastructures and the regulatory environments of these developing countries also permit the completion of clinical trials up to six months faster (or more) than in the United States[14]; this translates into even more money saved by the biopharmaceutical companies and clinical trial sponsors. With the steady improvement of intellectual property laws in both China and India[15], drug companies now have good reason to relocate at least some of their clinical trials to these countries, given the promise of cheaper, faster and more reliable data.

The Obstacles To Enforcing Best Practices

The relative inexperience of China and India's regulatory environments should not be confused with inadequacy. For example, China has more rigorous drug import licensing requirements than many developed countries[16], and its State Food and Drug Administration (SFDA) is working on a new product safety plan to monitor and improve post-market surveillance.[17] Similarly, India requires extra toxicology tests between Phase II and Phase III clinical trials that most developed nations do not require.[18] Nevertheless, the relative inexperience and eagerness of young bureaucracies can create some additional problems for establishing and enforcing best practice standards.

A chief concern is that developing countries may relax their standards and speed up the drug approval process as an inducement for foreign companies to import much-needed medical treatments and invest capital into the local economy. Indeed, India launched a campaign in 2005 to recruit pharmaceutical researchers by amending a long-standing law that had required foreign companies to delay clinical testing in India until after the drug was proven safe by the country of origin; India now permits concurrent testing.[19] 

India is also in the process of developing a new National Biotechnology Development Strategy to create a more efficient approval process for biotechnology products, including the exemption of certain biotechnology sectors from otherwise compulsory licensing requirements.[20] Meanwhile, the Drug Controller General of India (equivalent to the U.S. FDA) had only three pharmacists – and no medically-trained doctors – on its technical staff as recently as 2006.[21]

The Chinese government also faces a potential challenge to harmonize and fulfill conflicting roles, because the government is a key investor in many of the biotechnology projects it regulates.[22] For example, after China’s approval of Gendicine[23]  – a potentially breakthrough gene therapy for cancer – several outside observers raised concerns. Dr. Marshall Posner of the Dana-Farber Cancer Institute cautioned that the clinical trials were “not done with a high degree of structure, and it is not clear what protocols were followed or how patients were randomized.”[24]  Furthermore, the editors of Science magazine suggested that, with as few as 124 patients involved in the combined Phase II/Phase III trials, the evidence for the drug’s efficacy was “scant.”[25] 

In the wake of several deaths last year from improperly processed drugs and the more recent systems failures concerning exported Chinese foods and drugs, China now is revisiting some of its clinical trial standards. However, thus far the overall emphasis of this review has been on manufacturing, not research.[26]

In addition, many researchers in developing countries may be unfamiliar with best practice standards. Of India’s half million doctors, fewer than 200 were trained in internationally-recognized Good Clinical Practices as of 2005.[27] Similarly, fewer than a dozen pathology laboratories met the criteria for Good Laboratory Practices, and only half of all large hospitals had Institutional Review Boards (and many of those lacked the expertise to evaluate protocols).[28] Meanwhile, a 2001 U.S. FDA report suggested that Chinese Institutional Review Boards (IRBs) tend to be closed and secretive, and may not always have ethics committees.[29]

Additionally, human subject protection standards are in the formative stages and are not generally applied. For example, in 2002, Taiwan’s Center for Drug Evaluation surveyed 71 clinical trial protocols and found 227 deficiencies in the informed consent forms alone, including violations of the elements required by the International Conference on Harmonisation’s (ICH’s) Good Clinical Practice Guidelines.[30] 

The Limited Overseas Reach Of The U.S. FDA

Even with commitment, hard work, and the implementation of recent regulatory safeguards, the relatively new regulatory agencies of China, India, and other developing countries are not yet consistently able to establish and enforce best practices for biopharmaceutical research. More established government actors – such as the U.S. FDA, the European Union’s Committee for Medicinal Products for Human Use, and the Japanese Ministry of Health, Labor, and Welfare – also have an opportunity to regulate outsourced clinical trials. As mentioned above, non-U.S. data has become a prominent feature of new drug applications in the United States.[31] To use foreign data to register new pharmaceutical in the United States, the FDA requires that clinical trials meet conditions for quality and ethics set by various U.S. federal regulations and by the ICH’s Guidelines for Good Clinical Practice.[32]

The FDA has authority to inspect foreign clinical trial sites to check if all required conditions are met. In 2004, the FDA found that researchers failed to follow proper protocols in 30 percent of inspected international sites.[33] However, the FDA does not have sufficient resources to inspect all outsourced clinical trials, a problem that will grow as the practice of outsourcing continues. The FDA currently has only 200 inspectors (some of whom work part-time) to oversee an estimated 350,000 domestic testing sites, of which they reach less than 1 percent.[34] 

Due to the added constraints of logistics, diplomacy and expense, the FDA’s inspectors reach even fewer foreign trial sites (about 60 to 70 per year).[35] Additionally, whereas the FDA inspects approximately 250 domestic IRBs each year, it conducts no such investigations of foreign IRBs.[36] Furthermore, even if the FDA does find a violation overseas, the agency’s only recourse is to disqualify the data; the agency has no power to stop, punish or prevent the practices.[37] In sum, despite its best efforts and intentions, the FDA simply is not equipped to review all outsourced clinical trials.

Though the establishment of best practices is an ongoing challenge for governments worldwide, biopharmaceutical researchers have a responsibility to adhere to best practices no matter where their research is located. If properly aligned with market incentives, if recognized by government regulators, and if supported by an infrastructure for documentation, transparency and disclosure, a voluntary, industry-led initiative may be a truly effective way to achieve best practices in clinical trials across the globe. The next part in this two-part column explores the potential for such an initiative.

Leslie A. Platt is a counsel in the Washington D.C., offices of Pillsbury Winthrop Shaw Pittman LLP, focusing on the life sciences and health care. Jason Schwartz and Reza Zarghamee are associates and Vladimir Chechik is a reference services coordinator with Pillsbury Winthrop Shaw Pittman LLP. For information, please contact Leslie Platt at 202-663-8303, leslie.platt@pillsburylaw.com.

The views expressed in this article are solely those of the authors, and do not necessarily reflect the views of Pillsbury Winthrop Shaw Pittman LLP.

ENDNOTES

1. For example, the consulting firm A.T. Kearney Inc. recently developed a “Country Attractiveness Index for Clinical Trials,” which ranked China and India as the two most attractive locations to perform clinical trials outside the United States. See Wynn Bailey et al., Make Your Move: Taking Clinical Trials to the Best Location, A.T. KEARNEY (2006) http://www.atkearney.com/shared_res/pdf/Make_Your_Move_S.pdf.
2. See, e.g., Pharma Moves Ahead Cautiously in China, 309 SCIENCE 735 (July 29, 2005) (citing Novo Nordisk as first opening a research facility in China in 2002, followed by AstraZeneca, Eli Lilly, Roche and Pfizer); Indrajit Basu, India’s Clinical Trials and Tribulations, ASIA TIMES ONLINE (July 23, 2004) http://www.atimes.com/atimes/South_Asia/FG23Df03.html (citing clinical drug trials in India run by Novo Nordisk, Aventis, Novartis, GlaxoSmithKline, Eli Lilly, and Pfizer).
3. Daniel Levinson, Office of Inspector General, U.S. Dep’t of Health and Human Services, The Food and Drug Administration’s Oversight of Clinical Trials, OEI-01-06-00160 (September 2007), available at http://www.oig.hhs.gov/oei/reports/oei-01-06-00160.pdf.
4. See, e.g., Press Release, Embassy of the People’s Republic of China to the United States of America, China to Invest $1.2B To Improve Food, Drug Supervision (Aug. 8, 2007) (available at http://www.china-embassy-org/eng/gyzg/t349598.htm) (quoting China’s State Food and Drug Administration Spokeswoman Yan Jiangying as saying “China’s food and drug supervision work began late and its foundations are weak”).
5. Janet Rehnquist, Office of Inspector General, U.S. Dep’t of Health & Human Services, The Globalization of Clinical Trials, OEI-01-00-00190 (September 2001), available at http://oig.hhs.gov/oei/reports/oei-01-00-00190.pdf.
6. Levinson, supra note 3. That number may rise as high as 65 percent over the next three years. See Tufts Center for the 7. Study of Drug Development, OUTLOOK 2007 (2007), available at http://csdd.tufts.edu/InfoServices/OutlookReports.asp.
See Jennifer Kahn, A Nation of Guinea Pigs, WIRED (Mar. 2006), available at http://www.wired.com/wired/archive/14.03/indiadrug.html (citing an estimate calculated by the consulting firm McKinsey).
8. VIOXX® is a registered trademark of Merck & Co. Inc, and was a successful arthritis and pain medication. On Sept. 30, 2004, Merck voluntarily withdrew VIOXX from the market after a three-year clinical trial on the efficacy of VIOXX in preventing colorectal polyps showed an increased risk of cardiovascular events. See http://www.vioxx.com/rofecoxib/vioxx/consumer/voluntary_withdrawl_statement.jsp.
9. See Kahn, supra note 7.
10. See Bailey, supra note 1; Eli Lilly India Eyes Local Diabetic Market, EMERGING MARKETS ECONOMY (Aug. 6, 2003) (estimating that, by 2020, India will have 52 million diabetic patients); Basu, supra note 2 (stating that India’s pool of diabetic patients is the world’s largest).
11. See, e.g., Rehnquist, supra note 5; Basu, supra note 2; see also Dr. Mahadev Murthy, Clinical Trials in India: Current Trends and Future Opportunities, REGULATORY AFFAIRS FOCUS MAGAZINE (August 2006) (explaining that treatment-naivety “may be significant in testing the efficacy of investigational drug candidates, documenting better safety parameters, and minimizing drug-drug interactions”).
12. See Bailey, supra note 1 (citing China’s 1.4 million doctors, over one million nurses, and over one million technicians; also citing the high capabilities and expertise of India’s scientists, with English as the primary language for education and research); Zhu Shen, Unleash the Dragon, PHARMACEUTICAL EXECUTIVE (Dec. 1, 2004) (citing China’s 20,000 biologists with master’s degrees or higher, paid “one-fifth to one-third what similarly qualified biologists make in the United States); Pharma Moves Ahead Cautiously in China, supra note 2 (citing annual salaries for Chinese Ph.D.s as $10,000 or less); Hemant Joshi, Analysis of the Indian Pharmaceutical Industry with Emphasis on Opportunities in 2005, PHARMACEUTICAL TECHNOLOGY NORTH AMERICA (January 2003) (citing India’s 490,000 registered doctors and 600,000 registered nurses, most fluent in English).
13. See Bailey, supra note 1; see also Basu, supra note 2 (quoting an estimate by the Netherlands-based Rabo Bank that clinical tests in India would be 60 percent of standard U.S. costs); Pharma Moves Ahead Cautiously in China, supra note 2 (claiming clinical trials in China cost an estimated 30 percent less than in the United States or Europe).
14. See Bailey, supra note 1.
15. See, e.g., World Intellectual Property Organization, National Strategies and Policies for Innovation: A View from China and India, WIPO MAGAZINE (July 2007), http://www.wipo.int/wipo_magazine/en/2007/04/article_0007.html (citing T.C. James, Director of India’s Intellectual Property Division, on the Indian government’s $34 million project to modernize the administration of IP rights and update the legal framework; and citing Liu Jian, Division Director of China’s State Intellectual Property Office, on the Chinese government’s goals to increase IP awareness, establish a culture conducive to the respect of IP rights, and achieve more effective enforcement).
16. See Bailey, supra note 1 (explaining that the Chinese SFDA requires a drug import license for every drug shipment that enters the country for a clinical trial, and not just one license for each type of drug).
17. See Chang-Hong Whitney, Annual “Congress” Gathering Brings Healthcare Issues to the Forefront, MEDICAL PRODUCT OUTSOURCING (April 2007), http://www.mpo-mag.com/articles/2007/04/china-news (citing SFDA’s plans for 2007 to unveil new adverse-incident policy and reporting procedures, as well as new evaluation, notification and punishment policies). China’s SFDA also recently revised its regulations for the registration and development of new drugs, including a new fast-track approval process; many observers have called the new regulations “more stringent.” See Chinese SFDA Grants Immtech Fast Track Status, CNN MONEY.COM (Sept. 27, 2007), http://money.cnn.com/news/newsfeeds/articles/prnewswire/NYTH05227092007-1.htm.
18. See Bailey, supra note 1.
19. See Kahn, supra note 7.
20. Dep’t of Biotechnology, Ministry of Science & Technology of the Gov’t of India, NATIONAL BIOTECHNOLOGY DEVELOPMENT STRATEGY (2005), available at http://www.dbtindia.nic.in/biotechstrategy/BiotechStrategy.pdf.
21. See Kahn, supra note 7 (Mar. 2006).  This statistic has been true at least since 2005.  See Samiran Nundy et al., A New Colonialism? – Conducting Clinical Trials in India, 352 NEW ENGLAND JOURNAL OF MEDICINE 1633 (April 2005).
22. See Jerry Guo and Hao Xin, Splicing Out the West?, 314 SCIENCE 1232 (Nov. 24, 2006).
23. Gendicine is a product the SiBiono GeneTech Co.
24. Guo & Xin, supra note 22.
25. Id.
26. See, e.g., David Barboza, China to Revise Rules on Food and Drug Safety, N.Y. TIMES (June 7, 2007) (citing China’s plans to place new controls on food and drug exports by 2010, to increase inspections on production, and to crack down on counterfeiting); but c.f., China’s Deadly Drug Problem, 446 NATURE 598 (April 2007) (SFDA has recently increased the required number of patients for clinical trials).
27. Nundy et al., supra note 21.
28. Id.
29. See Rehnquist, supra note 5 (citing J. Lee, Clinical Research in China, 32 DRUG INFORMATION JOURNAL 1271s (1998)).
30. Yeong-Liang Lin, Compliance of Clinical Trial Consent Forms with International Guidelines: Analysis of Deficiencies, DRUG INFORMATION JOURNAL (January-March 2002).
31. See supra note 6 and corresponding text.
32. See, e.g., 21 C.F.R. §312.120 (2007) (detailing the federal requirements for “Foreign clinical studies not conducted under an IND”); International Conference on Harmonisation, GUIDANCE FOR INDUSTRY: E6 GOOD CLINICAL PRACTICE (1996), available at http://www.fda.gov/cder/guidance/959fnl.pdf (published as official U.S. guidance).
33. See Bailey, supra note 1.
34. Levinson, supra note 3; Gardiner Harris, Report Assails FDA Oversight of Clinical Trials, N.Y. TIMES (Sept. 28, 2007), available at http://www.nytimes.com/2007/09/28/health/policy/28fda.html.
35. See Rehnquist, supra note 5. That 2001 report – the last publicly available data for foreign clinical trial inspections – listed about 60 to 70 inspections for 1998 and 1999. Based on Levinson, supra note 3, U.S. FDA inspections of domestic clinical trials did not increase between 2000 and now; the same can be presumed for foreign inspections.
36. See Rehnquist, supra note 5.
37. Id.

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